Pritzker signs state budget, including lawmaker pay raise

Gov. J.B. Pritzker on Wednesday signed an approximately $40 billion state budget with more money for education and the state's child welfare agency, along with a measure that could pave the way for a graduated income tax in Illinois.

The spending plan for the fiscal year that begins next month has been called "balanced" by both Republicans and Democrats. It's a 2% increase over the current year, fully funds Illinois' $9 billion pension contribution and authorizes the borrowing of $1.2 billion to pay $6.7 billion in overdue bills. The budget also includes a $1,600 annual pay raise for lawmakers.

"A new era of fiscal responsibility has arrived in Illinois," Pritzker said at a Chicago bill signing alongside enthusiastic fellow Democrats and community leaders.

The income tax measure adds a constitutional amendment question to November 2020 ballots asking voters whether they want to switch from a flat-rate income tax to one based on income. If approved, the new scaled approach would take effect in January 2021.

The issue was a campaign pledge for Pritzker, who calls the graduated tax system a "fair" tax because it would replace the current 4.95% flat rate, which critics contend eats up a greater share of income at lower wages.

Republicans, who pushed back on the pay raises, were also critical of the graduated income tax measure calling it harmful for Illinoisans.

House Republican Leader Jim Durkin on Wednesday called it a "blank check for uncontrolled spending."

"Illinois families should remain very wary on the rates that are being 'promised' today - as Democrats will continue to come back, year after year, and pickpocket more money from Illinois families and businesses," he said in a statement.

Lawmakers approved the budget along with numerous other measures in the legislative session that wrapped up last weekend, including a sweeping infrastructure improvement plan that hike's the state's gasoline tax, a measure to legalize recreational marijuana, expanded casino gambling and codifying protections for abortion rights. Pritzker, who called it the "ambitious and consequential" legislative session in state history, plans to sign all the legislation.

The flurry of activity was a change from the previous four years, when then-Gov. Bruce Rauner's conservative agenda was stalled by Democrats who controlled the Legislature. The result was policy stalemate and a two-year budget deadlock that resulted in billions of dollars in debt.

Illinois continues to have the lowest credit rating among U.S. states, in part because of its unfunded pension liability.